Commentary on the economic , geopolitical and simply fascinating things going on. Served occasionally with a side of snark.

Tuesday, January 28, 2014

Turkey corruption scandal updates January 28 , 2014 - The main opposition party has voiced new graft claims against Prime Minister Recep Tayyip Erdoğan and his family with a question on a nearly $100 million transaction to the bank account of a foundation which counts the premier’s son, Bilal Erdoğan, as one of its board members......... Police chief suspended after revealing order to halt corruption operation ..... Lawsuit filed concerning PM, ministers and media figures ..... Turkish Lira eases as Central Bank announces higher inflation forecast ( no interest rate hikes though.. ) ...... Turkish PM Erdoğan accuses Gülen movement of trying to ‘steal national will’

Turkish main opposition voices new graft claims

‘You are giving your son an advantage by using your position,’ says CHP leader. CİHAN photo

The main opposition party has voiced new graft claims against Prime Minister Recep Tayyip Erdoğan and his family with a question on a nearly $100 million transaction to the bank account of a foundation which counts the premier’s son, Bilal Erdoğan, as one of its board members.

“TÜRGEV [Service for Youth and Education Foundation of Turkey] has an account at Vakıfbank: TR 20020001500158048013239675. Now I got questions for the prime minister: First, does TÜRGEV have such an account? And secondly, were 99,999,990 dollars transferred into this account on April 26? Is this money graft? Let’s satisfy our curiosity if you make a statement on these,” Kemal Kılıçdaroğlu, leader of the Republican People’s Party (CHP), said at a parliamentary group meeting yesterday.

The CHP head said Erdoğan had converted the foundation into a “center of graft” and pulled his own son into the graft network via TÜRGEV.

“It’s being run by Bilal Erdoğan. We are not beating the air. You are giving your son an advantage by using your position. You are asking for bribes [from businessmen] in return for pledging tenders. In one of your statements, you said: ‘I have never seen a thief learning how to steal from his son. It descends from father to son,’” Kılıçdaroğlu said. “You have pulled your own son into corruption and graft. Aren’t you aware what kind of a sin you have committed?”

Showing a picture taken three weeks before the Dec. 17, 2013, operation that showed Erdoğan and the now-arrested Reza Sarrab, along with other allegedly corrupt former ministers, Kılıçdaroğlu called the prime minister to immediately submit a summary of proceedings about four of his ministers to Parliament.

“Mr. Recep, even if we bring all washing machines together, they won’t be enough to clear the dirt on you. You should immediately send these proceedings. Otherwise I will write the title of ‘chief thief’ on your forehead,” he said.

Claiming that Erdoğan accepted two villas from a businessman in return for easing zoning restrictions in Urla, near İzmir, just after sacking the former governor for refusing to do so, Kılıçdaroğlu said, “I cannot understand their interests in villas; especially villas with pools.”

He also read the transcript of an alleged voice recording between Erdoğan and a businessman on the Urla villas.

Judicial bill will pass if no consensus reached on Constitution, justice minister says

A controversial draft bill, criticized for increasing the government’s power on the justice system, will pass at the General Assembly and become law if the four political parties in Parliament fail to reach a consensus over the Constitutional amendment.

The amendment is expected to include changes in the draft bill, according to the justice minister.

“If no consensus is reached, then we are prone to take steps in line with the consensus. If no consensus is reached over the Constitution’s 159th Article, then we are planning to enforce this [bill on justice system] as law before Parliament enters into break,” Justice Minister Bekir Bozdağ told reporters before the ruling Justice and Development Party (AKP) parliamentary group meeting Jan. 28.

Article 159 states the HSYK must be established and exercise its functions in accordance with the principles of the independence of courts and the security of tenure of judges.

On Jan. 24, Turkish Prime Minister Recep Tayyip Erdoğan said they will freeze some articles of the controversial bill to reshape the Supreme Board of Judges and Prosecutors (HSYK), also adding the government had no intention of entirely withdrawing the bill.

Bozdağ, however, said yesterday that the bill will pass from the General Assembly with some changes.

“Will it pass the way it is now? This depends on the General Assembly’s decision but I guess there will be some changes [to the bill]. There may be significant changes. Some articles might be removed,” said Bozdağ Jan.. 28.

Prime Minister Recep Tayyip Erdoğan had suggested constitutional changes as an alternative to a new law that would tighten government control over the judiciary, which he believes is using the corruption investigation to undermine him. However, the effect may ultimately have been similar, though the process would take longer.

The HSYK is the bull’s eye in Erdoğan’s campaign against the judiciary, as he has strongly maintained the HSYK has been infiltrated by followers of the reclusive U.S.-based Islamic scholar Fethullah Gülen, thus creating a “parallel state” apparatus in Turkey. The prime minister has claimed his action serves to restore judicial independence.

A massive graft investigation, which was launched last month and has implicated four ministers, has touched off a struggle for control of the judiciary, as the government has moved to increase its control over the key judicial body in a bid to head off similar probes in the future.

Police chief suspended after revealing order to halt corruption operation

An İzmir police chief was suspended on Tuesday after he made public a recording of a telephone conversation in which he received an order from his superior officer and the İzmir governor to halt a police operation into alleged corruption at the Port of İzmir.

İzmir Police Department's Financial Crime Unit chief Bora Köprül -- who was assigned to his position after the Dec. 17 corruption scandal erupted -- was suspended from his post after he made public the telephone conversation he had with İzmir Police Chief Ali Bilkay, in which he was ordered to halt a corruption operation at the Port of İzmir, and during the telephone conversation, İzmir Governor Mustafa Toprak -- who was with Bilkay at the time -- is heard giving an order to halt the operation.

“If the prosecutor asks anything, just tell him that you're working on it, but you'll not carry out any operation. This is an order from the governor,” Bilkay says in the conversation while Governor Toprak is heard saying: “These things [the corruption operations] have become a state matter. The same things are happening in İstanbul, too. When the prosecutor calls, tell him that you're working on the case.”

In the latest wave of personnel changes, nearly 500 police officials were reassigned in Ankara and İzmir last week, described by many as an effort to cover up the Dec. 17 corruption scandal. In İzmir, two deputy police chiefs and 10 commissioners were reassigned to different posts last Wednesday.

Furthermore, Aziz Takcı, a prosecutor who recently ordered the search of Syria-bound trucks being operated by the National Intelligence Organization (MİT) in Turkey's Adana province, was stripped of extraordinary powers to conduct investigations granted under Turkey's anti-terrorism laws.

Takcı, whose extraordinary powers were stripped on Thursday by the first chamber of the Supreme Board of Judges and Prosecutors (HSYK), will continue to serve as a prosecutor in Adana.

Media outlets have reported that last Sunday, in an investigation launched by Takcı, Turkish gendarmerie forces acting on a tip found weapons and ammunition on several trucks they stopped in the southern province of Adana.

First, the gendarmerie forces intercepted three Syria-bound trucks on suspicion they were transporting arms. The three trucks were brought to the Seyhan gendarmerie compound in Adana. Two of the trucks were reportedly filled with ammunition, while another was carrying weapons. The trucks, which officials said belonged to MİT, were searched by security officials. The prosecutor recorded the contents of the truck, but pressure from government officials prevented him from filing criminal charges, according to reports.

Lawsuit filed concerning PM, ministers and media figures

A number of lawyers and law associations have filed a criminal complaint about a number of politicians, bureaucrats and media figures -- including Prime Minister Recep Tayyip Erdoğan, Interior Minister Efkan Ala and Justice Minister Bekir Bozdağ -- alleging an attempt to influence the judicial process involving ministers implicated in the corruption scandal which erupted on Dec. 17.

Delivering a statement to the press at the İstanbul Courthouse, the lawyers accused the prime minister of maliciously trying to distort public perceptions about corruption and bribery, and of tampering with evidence concerning the probe.
The Justice and Law Association, the Clean Lawyers Association, the Independent Lawyers Association, the Young Bar and the members of the Reform in Justice Group were among those who sued Erdoğan and the two ministers.
Speaking on behalf of the plaintiffs, lawyer Sibel Şimşek claimed that the government's statement that “the corruption and bribery probe is a plot and a shady conspiracy of an international gang against the political process and the nation” are a part of a broad manipulation of public perception of the government. “With these assertions, the criminal allegations which are based on strong evidence are being covered and the illegalities are claimed to be legitimate,” Şimşek argued, adding that “as lawyers, we are very concerned and worried about these events.”
The government has displaced or removed police officers and prosecutors who were involved in the investigation into corruption and bribery in an effort to prevent the scandal from deepening. A second investigation, rumored to be even more serious for the government due to the involvement of Erdoğan and his children, is alleged to have been stifled in a blitzkrieg operation by the government, in which key police officers were replaced overnight and regulations introduced designed to cripple the investigative process.
Şimşek said that the government's struggle to escape investigation have turned into a witch-hunt that has resulted in 5,000 security personnel being demoted. “The prosecutors in charge of the investigations were openly threatened. The district governor of Urla, in İzmir province, was appointed to another province after he attempted to demolish mansions which a businessman connected to the prime minister had illegally constructed on an archeological site,” Şimşek reported as an example of illegalities committed recently by the government.
Şimşek also lashed out at the government for “bringing people under suspicion with claims of the existence of a parallel state without any evidence to prove it.”
These unlawful actions are still taking place in order to create pressure for the police forces, rendering them unable to perform their lawful duties, alleged Şimşek. “With the removal and reassignment of police officers and the demonization of some civil servants by accusations of the existence of a parallel state or an international gang, we think the Turkish people are being deluded,” she asserted.

Turkish Lira eases as Central Bank

announces higher inflation

forecast

The Turkish Lira, which approached the 2.4 threshold against the dollar on Jan. 27, eased to 2.26 early Jan. 28. Central Bank Gov. Erdem Başçı also announced that inflation forecasts had been revised upwards, while hinting that the bank will also use an interest rate hike to protect the weakening currency.

During a press conference Jan. 28, Başçı said the inflation forecast for 2014 had been revised from 5.3 to 6.6, admitting that the rise in the exchange rates and currency volatility would produce a higher inflation rate.

Speaking ahead of an emergency Monetary Policy Committee meeting to be held later on Jan. 28, Başçı also signaled that the bank may use a much-anticipated interest rate hike, considering the foreign exchange reserve and currency conditions.

"A rapid decrease of [foreign exchange] reserves would have other adverse consequences as well. Now, after this point, the interest rate weapon should be put into use," he said.

"The foreign exchange sales might drop after a recovery in the current account deficit in February and the usage of the interest rate weapon," he added.

The Turkish currency has been hitting record lows almost daily this year, under pressure from an escalating political crisis over a corruption scandal roiling the government as well as concerns about the economy.

The Central Bank has so far refrained from raising interest rates to defend the lira, amid government concerns that any rise in rates could jeopardize its growth targets.

Instead, it has been opting for an unorthodox policy mix, mostly reliant on regular foreign exchange auctions. The mix has been widely criticized by analysts for being "too complicated."

During presentation of the Bank's inflation report, Erdem Başçı said it would not hesitate to tighten monetary policy in a "lasting way" if necessary, and asserted the Bank's independence, amid investor concern that it has shied away from rate hikes under pressure from the government.

"Nobody should have any hesitation that the Central Bank will use all available tools. The bank will not hesitate to take steps to make lasting tightening in monetary policy if deemed necessary," he said.

'Ensure price stability'

Prime Minister Recep Tayyip Erdoğan, keen to maintain economic growth ahead of an election cycle starting in two months, has been a vociferous opponent of higher borrowing costs, railing against what he describes as an “interest rate lobby” of speculators seeking to stifle growth and undermine the economy.

The Central Bank’s announcement of an emergency Monetary Policy Committee meeting to be held later Jan. 28 has also given some respite to the national currency.

“Our goal during the Monetary Policy Committee meeting this afternoon will be to undertake steps that will ensure price stability,” Başçı said.

He also ruled out speculations about the timing of the emergency meeting, saying the only reason behind planning the meet for Jan. 28 night is the absence of a member who was abroad.

The Central Bank intervened heavily in the foreign exchange market to support the lira last week, plowing at least $2 billion into the foreign exchange market in an unsuccessful attempt to prop up the lira.

Prime Minister Recep Tayyip Erdoğan speaks during the Justice and Development Party (AKP) group meeting in ankara, Jan 28. AA photo

Prime Minister Recep Tayyip Erdoğan has slammed the Fethullah Gülen movement without directly giving a name, accusing the movement of “being hostile against its own country” and attempting “to steal the national will.”

“Islam is no one’s exclusive possession. Concepts such as serving and raising students are humanitarian concepts,” Erdoğan said Jan. 28 during a ruling Justice and Development Party (AKP) group meeting.The followers of Gülen, who lives in self-imposed exile in the United States, call themselves “Hizmet” (Service).

“Despite many of our sincere brothers, who have started with the love of service, the organization has preferred to be a tool for Turkey’s enemies,” Erdoğan said.

The prime minister said lies targeting him and his party were being distributed around Anatolia. “The biggest theft is the theft of the national will,” he said. “Those who attacked the national will on Dec. 17 [2013] with their fanatics within the judiciary cannot track corruption. They cannot fling the dirt of corruption at us. The losers of the ‘old Turkey’ are singing the tune of corruption as a choir. If you want to see corruption, go look in the mirror.”

The AKP has repeatedly accused Gülen’s movement of orchestrating the probes in an attempt to topple it from government. Erdoğan has denounced the existence of a “parallel state,” referring to Gülen’s followers who are known to hold key positions inside the police and the judiciary, allegedly taking decisions upon the movement’s orders.

The government has responded to the graft scandal with a massive purge within the police and with the preparation of a judicial bill that has drawn controversy for increasing the executive’s control over the judiciary.

In a recent interview with the BBC said that some of the demoted, sacked or reassigned members of the police and judiciary were not linked to his movement, rejecting the claims of having orchestrated the probes and arrests. He also describe the purges as 'undemocratic.'